Reading’s success fuels development demand Posted on: September 24th, 2014 Reading’s economic success in recent years is fuelling strong demand for development across all sectors, according to the town’s borough council. Councillor Tony Page, deputy leader of Reading Borough Council, told a Built Environment Networking Event on ‘Reading General Development Plans 2014’ at Reading’s Town Hall, that development investment was sorely needed. “There are major growth pressures in housing, education and transport,” Page said. This month Reading Borough Council approved a 1,000-home public housing building programme, and is pushing ahead with a series of public transport schemes, building on the success of the recent redevelopment of Reading Station. Kier Property also told the event it was making progress on two major schemes in the town – the 150,000 sq ft redevelopment of Reading Civic Centre and the redevelopment of the former Hewlett Packard site. The two organisations discussed their development plans in detail – READING BOROUGH COUNCIL Reading is sometimes know as the ‘capital’ of the Thames Valley. The council has been responsible for kick-starting scores of high profile schemes in recent years, not least the complete overhaul of Reading station, which is now largely complete. The town stands to benefit further from other planned transport upgrades, including the extension of Crossrail to Reading in 2019, the electrification of Great Western Mainline between 2014 and 2018, and the delivery of a direct rail service from Reading to Heathrow from 2021. Opportunities The council approved plans this month for a major programme to build close to 1,000 public homes. In the transport sector, the council is planning to extend its park and ride scheme, a series of works to improve walking and cycling routes through the town and the upgrade of various road junctions. Strategy The council’s area of control has tight boundaries, so it works closely with neighbouring authorities to achieve its aims. Page says property and construction firms can expect honesty from the authority: ““We will be honest and upfront with you from the start, and whilst we might ask for £10m in section 106 payments we might just settle for £5m.” KIER PROPERTY Kier Property is the property arm of £2.7bn-turnover contractor Kier. It draws around £100m of equity from the group each year, which it gears up in order to spend £300m a year on development schemes. Around 20% of its work is in structured finance or PFI schemes. In development, the sectors it works in are offices (15%), hotel and leisure (16.5%), retail (17%), residential and land sales (12%) and trade (19.5%). Around half of its development work is awarded to its sister division Kier Construction, with the rest put out to market for other contractors. Taking into account Kier Property’s activities in Reading and the Thames Valley over the last seven years, and its current development pipeline, it is investing £300m in the region. Recent schemes include central Reading office development One Reading Central and a 65,000 sq ft enterprise centre for the University of Reading. Opportunities Kier Property was appointed to redevelop Reading Civic Centre around a year ago by Reading Borough Council. The planned town centre mixed-use scheme is 150,000 sq ft of space over 2.1 hectares. The scheme will include 350 residential units. Demolition will commence this year and is expected to take 18 months. A planning application will be submitted in the second quarter 2015, with start on site first quarter 2016 and completion expected fourth quarter 2017. The firm is working with the owners of nearby Broad Street shopping centre to encourage them to also redevelop their assets in line with Kier’s plans. Kier Property was appointed preferred developer to redevelop Hewlett Packard’s site in Reading this month. The firm is finalising the acquisition of the site. The 20.5 acre site is earmarked for a mixed-use scheme, with Kier planning to develop 10 acres of residential and 10 acres of employment and commercial uses. A planning application is expected in early 2015. Strategy Kier Property is active in the market and is currently looking to expand its development pipeline. “We’re very active at the moment. In the last 12 months we’ve delivered £350m to the market,” said Leigh Thomas, director at Kier Property. “But we’re always looking at new projects to redevelop and we’re on a big push at the moment.” Thomas said he expected the division’s annual equity allocation from the Kier group to double from £100m to £200m “within two or three years”.